HALIFAX, May 8, 2012 /CNW/ - Nova Scotia Power today applied to the Nova Scotia Utility and Review Board (UARB) for approval of a Rate Stabilization Plan requesting rate increases of 3% per year for the next two years.
The Rate Stabilization Plan would add about $3.50 a month to an average household's power bill in 2013 and again in 2014. The precise amount will vary depending on an individual household's electricity use.
"Any rate increase is difficult for families and businesses," said Rob Bennett, President and CEO of Nova Scotia Power. "We're trying to minimize the impact on our customers. That's why we're proposing a plan that will stabilize rate increases and give us all time to adjust to the rising cost of providing electricity in Nova Scotia."
The two biggest forces driving up the cost of providing electricity are:
- Troubles in the pulp and paper industry, which have greatly reduced payments by NewPage and Bowater to the fixed costs of the Nova Scotia's electricity system;
- The transition from coal to renewable energy, which creates upfront costs, but will lead to future savings and stability in electricity prices.
The proposed Rate Stabilization Plan will delay recovery of expenses relating to the 2012-2014 period that could total $120 million. These are mainly fixed system costs formerly paid by the paper mills. Recovery of those expenses would begin in 2015. Collection of a previously deferred tax expense ends in 2015, so the $120 million could be paid over a period of eight years while costing customers about the same as they now pay for the tax expense.
"We know Nova Scotians are angry about rising electricity prices," Bennett said. "We're working hard to keep our costs as low as possible. We've reduced our workforce, and we've switched two of our four generation units at Lingan to seasonal use. But even the reductions we've made can't make up for the lost contributions from the paper mills. The Rate Stabilization Plan isn't a perfect solution, but we're trying to do the best we can for everyone in a tough situation."
If approved by the UARB, new electricity rates would take effect January 1, 2013.
The full rate application and a summary document are available on the Nova Scotia Power website, www.nspower.ca/2013GRA.
This press release contains forward-looking information and forward-looking statements which reflect the current view of Nova Scotia Power with respect to the Company's objectives, plans, financial and operating performance, business prospects and opportunities. Wherever used, the words "will", "would", "could" and similar expressions identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. Nova Scotia Power disclaims any intention or obligation to update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
About Nova Scotia Power
Nova Scotia Power Inc. is the largest wholly-owned subsidiary of Emera Inc. (TSX-EMA), a diversified energy and services company. Nova Scotia Power provides more than 95% of the generation, transmission and distribution of electrical power to 482,000 customers in the province. The company is focused on new technologies to enhance customer service and reliability, reduce emissions and add renewable energy. Nova Scotia Power has 1,700 employees and $3.5 billion in assets. Learn more at www.nspower.ca
For further information:
Nova Scotia Power
(902) 233-6015 (C)